Effect Of Budgeting Practices on Performance of Government Funded Projects in Nairobi Metropolitan, Kenya

Abstract

Governments commonly undertake infrastructural projects such as road constructions, housing and constructions of social amenities such as health facilities to provide accessible health care to better the lives of its citizens. However, many projects are not successfully completed. These projects experience delays, quality issues and budget overruns, thereby impairing the development agenda. This study aims to assess the effect of budgeting on the managerial performance of the government funded projects in Nairobi. The study will be guided by four objectives namely; to assess the effects of budget planning on the project performance of government-funded projects in Nairobi County; to investigate the effects of participation on the project performance of government-funded projects in Nairobi County; to determine effects of budgetary control on the managerial performance of government-funded projects in Nairobi County; to establish the effects of budget review on the project performance of government funded projects in Nairobi Metropolitan area and to establish the effects of budget review on the managerial performance of government-funded projects in Nairobi County . To achieve this, the study will adopt descriptive research design. The study will target all the 60 government funded projects in Nairobi Metropolitan Area. The study used census since the target population is manageable. Questionnaire was used to collected primary data. The data collected were analysed using both descriptive statistics and inferential statistics where the study adopted regression model and use VIF test for model testing. The results were presented in tables, charts and graphs. The study established that budget planning with p=0.193>0.05indicates that budget planning has insignificant effect on project performance, budgetary control with p=0.024<0.05 indicates that budgetary control has significant effect on project performance. Budget participation p=0.062<0.05 shows that budget planning significantly influence project performance. Budget review p=0.035<0.05 implies that budget review had a significant effect on project performance. The study concludes that budgeting practices has significant effect on project performance. The study recommends that the management team of the Nairobi Metropolitan area projects should encourage all section heads to prepare flexible budgets. The management of Nairobi Metropolitan area should consider putting in place a fully-fledged budgeting department with clearly established roles and responsibilities. The project managers of these project in the Nairobi Metropolitan area should encourage all project firms to improve on their budgeting practices and techniques in order to improve on their project performance.